Home Buyers are in tough - Calgary’s Market Hasn’t Been This Tight Since 2006

Does anybody remember the state of this town in 2006? How crazy the market was? It was before we were using electronic signatures to sign documents, and people were lining up on lawns with written contracts in hand before they even viewed the property. It was absolute mayhem. Fast forward to 2024, you cannot sum up the market any better than Ann Marie Lurie, the Chief Economist for the Calgary Real Estate Board, did. “We have not seen March conditions this tight since 2006, which is also the last time we reported high levels of interprovincial migration and a months-of-supply below one month. Moreover, we are entering the third consecutive year of a market favouring the seller as the two-year spike in migration has driven up demand and contributed to the drop in re-sale and rental supply. Given supply adjustments take time, it is not a surprise that we continue to see upward pressure on home prices.”

I really feel for buyers right now. Every time we sit down with somebody getting into the market, our goal is to educate them on what they need to do to get a home. What we're telling our clients right now is, well, we can run comparable sales for you, but expect to pay slightly more than the last home to sell that's exactly like the one that you are trying to buy. Also, more likely than not, you are going to get yourself into a multiple-offer situation. In these instances, we are seeing more and more properties selling unconditionally. This can be a real challenge for any buyers who need to have a financing condition or even want to have a property inspection on their offer. These two things can lose you a home quickly when you are competing with other buyers. Now, I'm not encouraging anybody to remove these conditions. I'm simply stating that to win in this market, you may have to forgo a property inspection and have your financing so rock solid that you can confidently go in without that condition because there are a lot of desperate people who need a home to live in that are willing to take that risk.

When we are out helping buyers buy and sellers sell right now, I am absolutely floored at what we are selling homes for. The overall benchmark price has risen to almost $600,000 in Calgary, and if you are trying to buy a single-family home, that number is closer to $800,000. These are insane figures to me, but they are the new reality and will not change anytime soon. For the last three years, immigration and interprovincial migration have put a lot of pressure on this market. Until that slows down, our market isn't going anywhere but up. The absorption rate is at 0.95 months of supply right now. To explain that, absorption is if there were no more homes listed in Calgary ever, it would take less than one month to sell everything we have based on the current number of buyers that are buying homes. For this market to be balanced, we need about three and a half months worth of inventory. The standing inventory right now? We are sitting at just over 3,000 units. For this market to be balanced, we need over 7,000 units. An influx of 4,000 units does not happen overnight. Barring any significant global events, that gap can take years to overcome.

Our View From the Street

So that's the reality facing buyers in today's market. I know it can seem daunting but with any market, all you have to do is beat it. having strategies to go in and win multiple offers with creative things like escalation Clauses, and negotiation tactics and having a realtor who knows how to read a listing properly based on what they see when they view the home can help and be to your advantage. 

If you're a seller in this market the same rules still apply to you as in any market. You cannot overprice your house because buyers are very savvy. We still have inventory sitting around at the end of the month, so sellers, stage your home properly,  price it according to the most recent sales, and allow easy access for buyers. Your home won’t be on the market long. 

Any questions? Feel free to hit me up anytime. 

Cheers,

KR

P.S. - if you want to check out all the latest stats from the Calgary Real Estate Board, click here.

Ken Rigel

CEO and Team Lead

Ken Rigel Group @ EXP Realty

O: 403 207 1748

C: 403 835 6338

email: [email protected]